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Default Beneficiaries If you fail to document your beneficiary designation, your beneficiary may be determined by federal or state law or by the plan document that governs your retirement accounts.

For qualified plans such as profit-sharing plans, 401(k)s and money purchase pension plans, federal regulations automatically designate the spouse of the account owner as the beneficiary.

For instance, if you name two individuals as your designated beneficiaries and one predeceases you, the share that belonged to the deceased beneficiary automatically goes to the surviving beneficiary.

With a customized designation, you can choose how that portion would be distributed instead of having it default to the surviving beneficiary.

Many spouses, expecting that one will predecease the other, name each other as their designated beneficiaries.

The issue of simultaneous death is then addressed by state law, which will determine that one spouse died first, even though both deaths occurred at the same time.

The beneficiary designation you choose may determine if your elections are carried over to the next generation.

The following are some basic beneficiary designation designs: Per-Stirpes Designation In the event your primary beneficiary predeceases you, a per stirpes beneficiary designation provides that the share he or she would have received goes to his or her heirs.

While many of us ensure that other important documents such as wills are updated on a frequent basis, we tend to neglect our retirement account beneficiary designations.

You can also draft customized beneficiary designations to address "what-if" situations.

For instance, what if your primary beneficiary predeceases you and you fail to update the designation?

Your retirement accounts are not part of your estate and generally not governed by the provisions of your will, so it is important to keep these retirement documents updated.

There have been numerous cases of retirement account owners who have been divorced and remarried but have neglected to update their beneficiary designations accordingly.

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